Jack Dorsey’s Bold Move: Why 4,000 Block Employees Just Got the AI Axe—What’s Next?

Dorsey said AI-driven efficiency demands smaller teams, triggering one of the largest layoffs in Block’s history.

Jack Dorsey announced that Block is reducing its workforce by nearly half, cutting more than 4,000 employees and bringing total headcount from over 10,000 to just under 6,000.

In a note shared publicly on X, Dorsey described the move as “one of the hardest decisions in the history” of the company and said all employees would be notified the same day whether they are being asked to leave, entering consultation, or staying.

Massive Layoffs at Block

He stated that affected employees will receive 20 weeks of salary plus one additional week per year of tenure, equity vested through the end of May, six months of health care coverage, their corporate devices, and $5,000 to support their transition.

Employees outside the United States will receive similar support. Details may vary according to local requirements. Dorsey said the decision was not driven by financial distress, while adding that the company’s business remains strong. Instead, he added,

“But something has changed. We’re already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company. and that’s accelerating rapidly.”

Dorsey said he considered gradually reducing staff over months or years, but chose to act immediately. He said that repeated rounds of layoffs would harm morale, focus, and trust among customers and shareholders. He acknowledged that some decisions may prove wrong and that flexibility has been built in to account for that while continuing to serve customers.

Dorsey Admits Over-Hiring

The layoff announcement drew mixed reactions across social media. Some users described the severance terms as generous, while others focused on concerns about artificial intelligence replacing human roles. One user, Will Slaughter, tweeted that the cuts were less about AI and more about management decisions, while taking a jibe at Block, which had more than tripled its headcount from 3,900 in December 2019 to 12,500 by December 2022.

He described the reduction as unwinding an “insane COVID overhiring binge” and attributed it to managerial incompetence rather than technological change. In response, Dorsey admitted to over-hiring during the pandemic.

Other users criticized the optics of citing AI in a layoff note written in lowercase. Some expressed concern that job cuts linked to AI could become a broader trend as the company’s stock price rose by 24% in post-market hours.